Question 1

What is the minimum down payment required to buy a home?

Accepted Answer

It depends on the loan type. VA loans allow 0% down for eligible veterans and active-duty military. USDA loans offer 0% down in qualifying rural areas. FHA loans require 3.5% with a 580+ credit score. Conventional loans start as low as 3% down for qualified buyers.

Question 2

Is a 20% down payment required to avoid mortgage insurance?

Accepted Answer

On a conventional loan, yes, putting 20% down eliminates PMI. On FHA loans, mortgage insurance is required regardless of down payment and lasts the life of the loan if you put less than 10% down. VA and USDA loans have no PMI at all.

Question 3

What is PMI and how much does it cost?

Accepted Answer

Private mortgage insurance (PMI) protects the lender if you default. It applies to conventional loans with less than 20% down. The cost typically ranges from 0.5% to 1.5% of the loan amount annually, paid monthly. It cancels automatically once your equity reaches 20% of the original value.

Question 4

Is a larger down payment always better?

Accepted Answer

Not necessarily. A larger down payment lowers your monthly payment and eliminates PMI, but it ties up cash that could be used for reserves, home improvements, or investments. Dan can show you the true cost-benefit of each option for your specific situation.

Question 5

Can I use gift funds for a down payment?

Accepted Answer

Yes, for most loan types. FHA allows 100% of the down payment to come from gifts from family members. Conventional loans also allow gift funds with proper documentation. VA and USDA loans also permit gifts in most cases.

Question 6

Are there down payment assistance programs available in Bakersfield?

Accepted Answer

Yes. California offers several programs including CalHFA and local Kern County assistance that can cover part or all of your down payment through grants or deferred loans. Eligibility is based on income and purchase price. Dan can evaluate which programs you qualify for at no cost.

Option	Down Payment	Loan Amount	P&I	Mtg. Insurance	Total/mo
0% Down VA loans only🎖️ VA	$0	$450,000	$2,844	None	$2,844
3% Down Conventional (HomeReady / Home Possible)🏠 Conventional	$13,500	$436,500	$2,759	$309(PMI)	$3,068
3.5% Down FHA minimum (580+ credit score)🏛️ FHA	$15,750	$434,250	$2,745	$199(MIP)	$2,944
5% Down Conventional, 95% LTV🏠 Conventional	$22,500	$427,500	$2,702	$232(PMI)	$2,934
10% Down Conventional, 90% LTV🏠 Conventional	$45,000	$405,000	$2,560	$108(PMI)	$2,668
20% Down Eliminate mortgage insurance entirely✅ No MI	$90,000	$360,000	$2,275	None	$2,275

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